It’s a FedEx (FDX) Friday on Wall Street. The delivery company’s pulled guidance and warning about a worldwide recession — in an interview with our Jim Cramer on Thursday night— is shaking the stock market. FedEx is considered a bellwether, seeing trends in the economy before they become apparent to everyone else. That’s why the market on Friday is taking its cue from the company. But the pain is not being distributed evenly across individual stocks. As Jim wrote to Club members shortly after his interview with FedEx CEO Raj Subramaniam aired, companies with little economic sensitivity should be the ones that bottom first. Companies that are more cyclical are likely to fare worse. We’re going to dissect Jim’s Charitable Trust, the portfolio we use for the Club, to separate the defensive from the vulnerable. Of course, there is some question about how much of FedEx’s struggles are their own doing and how much can be attributed to deteriorating macro conditions. FedEx hasn’t exactly been a perfect company in recent years, and Subramaniam acknowledged to Jim that FedEx needs to get its own house in order. However, the CEO repeatedly stressed that economic conditions, especially in Asia and Europe, are worsening by the week. As long as the market is trading off that impending-recession narrative, we have a decent idea which stocks in our portfolio are poised to hold up OK, relatively speaking, and which will be in the crosshairs of sellers. Little economic sensitivity We’ve taken steps to make our portfolio more defensive since the spring, when it became clear the Federal Reserve would aggressively hike rates to tamp down on inflation — even if it caused the economy to slow dramatically. We have a handful of names that fall under the umbrella of classic defensive plays: Procter & Gamble (PG), AbbVie (ABBV), Johnson & Johnson (JNJ), Eli Lilly (LLY) and Humana (HUM). P & G makes the types of products people really can’t live without: toothpaste, laundry and dishwater detergent, toilet paper. We bought additional shares of P & G earlier Friday. The trio of pharmaceutical stocks — AbbVie, J & J and Eli Lilly — also have businesses that are more resilient in times of economic weakness. We can also put Danaher (DHR) in this category, as the company’s life-sciences products will still needed by researchers in academia and the biopharma industry alike; same goes with its diagnostic division. Humana (HUM), as a health insurer, is similar to those in the pharma sector. When times get tough financially, health insurance is unlikely to be the first thing people cut out of their budgets. Constellation Brands (STZ) is another stock in our portfolio that we consider to be more resilient because alcohol sales generally hold up well even in an economic slowdown. We made that point back in May, when we initiated our position . Costco (COST) also has little economic sensitivity, as people still turn to the wholesale retailer for their groceries. An important caveat is that this is a very complicated time — a ground war in Ukraine involving a major global energy player in Russia, strict pandemic rules in China, the world’s second-largest economy, high inflation in many nations including the U.S. and the strong U.S. dollar. For all these reasons, especially the way inflation has pressured margins this year, some of the traditional investment approaches for recessionary moments are more nuanced. P & G is a good example in our portfolio, and the recent struggles of Walmart (WMT), which the Club no longer owns, illustrates the point, too. Top-line sales may ultimately look OK, but bottom-line earnings are what matters in the end. Economically sensitive Industrials, energy and cyclical technology companies like semiconductors fall into this camp. Financials also are historically dragged down when investors fear a recession; after all, a significant uptick in loan defaults certainly would not help banks. We intentionally don’t own a lot of industrials, except for Honeywell (HON) and Linde (LIN). We see reasons to keep owning these companies — Honeywell’s aerospace business is recovering the from the Covid pandemic, and a lot of Linde’s gas business is fairly defensive and it has pricing power — but that doesn’t always matter to the market. Industrials were the worst-performing S & P 500 sector on Friday. Autos like Ford Motor (F) are also viewed as cyclical plays. Our energy position, which now consists of Coterra Energy (CTRA), Devon Energy (DVN), Halliburton (HAL), and Pioneer Natural Resources (PXD), is how we’re hedging against inflation. That’s because higher oil and natural gas prices have been a big contributor to the price pressures in the economy. However, the traditional recession playbook involves selling energy stocks due to fears of demand collapsing. It matters little that this time around we’ve spent months talking about the lack of oil supply. The S & P 500 energy sector was the third-biggest decliner Friday. Morgan Stanley (MS) and Wells Fargo (WFC) are the only two financial stocks we own. While Morgan Stanley has been weighed down by a near-halt in capital markets activity, we look at the company as a more long-term play as it CEO James Gorman diversifies its revenue streams through its ETrade and Eaton Vance acquisitions. Wells Fargo, on the other hand, is a clear beneficiary of rising interest rates, which the Fed’s tightening cycle is delivering. That will flow down to earnings, helping offset lower mortgage revenue and potential credit losses. For what it’s worth, Wells Fargo CFO Mike Santomassimo indicated at a conference Tuesday that consumers are holding up quite well, even as the bank sees a “small uptick in delinquencies.” “As rates rise, the economy will slow and that will have an impact on a lot of these consumers. But so far, the majority of people are weathering it pretty well,” he said. Growth-oriented technology has been out of favor pretty much all year, especially chipmakers like Nvidia (NVDA), Advanced Micro Devices (AMD), Qualcomm (QCOM) and Marvell Technology (MRVL). Historically, the semiconductor industry has been prone to periods of considerable expansion and contraction, which has been a dark cloud hanging above the cohort for months even as secular trends like cloud growth remain strong. Concerns about how enterprise spending would hold up in a worldwide recession is likely to weigh on other tech stocks in the portfolio like Cisco Systems (CSCO) and Salesforce (CRM). The strong U.S. dollar hurts Salesforce, too. Facebook parent Meta Platforms (META) and Alphabet (GOOGL) rely on advertising dollars for the majority of their revenue, and advertising spending has typically been correlated to strength of the economy as marketing budgets are among the first to get slashed in a downturn. Alphabet deserves a deeper analysis, though, since Google Search advertising provides such a strong return on investment. Club members who’ve been here for a few months may recall our discussion of this in the context of Snap’s (SNAP) digital ad warnings . When companies tighten their belts on marketing, they may look to more experimental advertising channels to cut back on first, while continuing to spend on tried-and-true Google Search. Also Search does a ton of business with the travel industry and all signs suggest we are still in a travel boom. Alphabet also has its fast-growing Google Cloud division, which accounted for roughly 9% of the company’s second-quarter revenue. For Meta, advertising accounts for pretty much all of its revenue. Walt Disney Co. (DIS) is another company that is generally considered cyclical since it provides services that are discretionary. It’s not essential to take a vacation to Disney World. However, in the same vein we talked about with defensive stocks, it’s important to note again that travel spending has proven resilient this summer in the face of slowdown concerns. That’s a side effect of the pandemic, as spending has shifted away from goods to services now that most people feel safe to travel and eat out again. FedEx’s CEO mentioned this shift Thursday night, for that matter. Nevertheless, Disney is the kind of company that investors shun in their recessionary playbook even as its theme park business has been booming. Wynn Resorts (WYNN) in theory is similar to Disney, but, as we’ve been saying for months, the Chinese government’s restrictive approach to Covid is pretty much all that matters with this stock. A pivot toward a more accommodating policy would elevate Wynn’s resorts in the Chinese special administrative region of Macao. Even as Wynn’s Las Vegas and Boston operations look strong, this one is all about Macao. Mixed bag The stocks discussed here have a mixture of economically resilient and sensitive characteristics to them, such as Microsoft (MSFT) and Apple (AAPL). Softness in business spending could be a drag for Microsoft, just like a slowdown on the consumer side could hit Apple, but both companies have subscription-based businesses that should provide support. Apple, it’s important to note, also is a premium brand, and higher-income consumers are likely to weather a recession better than lower-income individuals. Amazon (AMZN) falls into the mixed bag category because its immensely profitable cloud computing division, Web Services, continues to show strength. And while its e-commerce business may appear vulnerable to a consumer pullback, some analysts think it’s holding up rather well in recent weeks. A strong Prime Day in July is another data point backing up that view. The two newest stocks in our portfolio — Starbucks (SBUX) and TJX Companies (TJX) — also fall into this category. Weaker consumer spending might mean fewer meals away from home, but Starbucks occupies a distinct niche thanks to customer loyalty to the brand. CEO Howard Schultz said earlier this week the company has been “immune” to any downturn in consumer spending, and the increasing sales mix favoring cold beverages also bodes well because those types of drinks are harder to replicate at home than a standard cup of hot coffee. As for TJX, apparel is a more discretionary type of spending but the parent company of TJ Maxx and Marshalls sits in the off-price category. That’s a good thing in this moment, relatively speaking. We think retailers whose perceived value proposition is high have an advantage in an economic slowdown caused partly by inflation. It’s similar to why we think Costco is the ideal retail stock right now, as we mentioned earlier, but the difference is that buying new clothes is less essential than groceries. Even still, when people do want new clothes in a recession, they may opt to go bargain hunting at TJX’s stores. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. 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